Quick summary

Yes — UK Business Loans can put construction businesses in touch with lenders and brokers that commonly work with extended payment terms and contract retentions. We are an introducer (not a lender) and will match your enquiry to specialist partners who understand retention discounting, retention finance, invoice factoring configured for construction, contract bridging and other solutions. Success depends on the contract, the counterparty (who holds the monies), retention release profile and the evidence you can supply. To get tailored options quickly, start a free eligibility check: Get a Free Eligibility Check.

What are “extended payment terms” and “retentions”?

Understanding these two terms is essential for finding suitable funding.

• Extended payment terms — invoices paid well beyond standard industry timings (e.g., 60, 90, 120+ days). Many developers and large contractors operate long payment cycles that leave subcontractors and suppliers facing cash shortfalls.
• Retentions — a portion of contract value (commonly 3–10%) withheld until stages complete or the defects liability period ends. Retentions are designed to protect the employer from poor workmanship but can tie up significant sums.

Example: on a £500,000 contract with a 5% retention, £25,000 is held back until final account and defects period conclude. If payment cycles are 90–120 days and retentions are only released months later, your working capital can be severely constrained.

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Can UK Business Loans put you in touch with lenders who accept retentions & long terms?

Short answer: yes — in most cases. UK Business Loans introduces construction firms to lenders and brokers with specialist experience in retention-friendly finance. We work with partners that offer products tailored to construction cashflow challenges, including retention discounting, invoice factoring structured for retentions, contract bridging and supply-chain finance.

Important: we are an introducer — we do not lend and we do not give regulated financial advice. Completing an enquiry simply allows us to match your business to the most suitable providers for your circumstances.

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Which finance products suit projects with retentions and long payment cycles?

Invoice finance / factoring for retentions

Invoice finance (factoring) unlocks cash tied up in invoices. Specialist factors offer retention-aware facilities (sometimes called retention factoring or retention discounting) where a portion of the retention is advanced once the invoice is approved or the employer is deemed creditworthy.

• Advance rates vary; retentions typically attract lower advance percentages until release conditions are met.
• Fees depend on client credit strength and advance level.

Retention finance / retention discounting

Retention finance is a specialist product that releases retention monies earlier than the contract schedule in return for a fee. Options include retention bonds or an advance against evidence of the retention being held.

• Useful where retentions are material and the employer is solvent but release is delayed.
• Cost is higher than standard invoice finance due to the legal and administrative complexity.

Contract or project finance / bridging

Short-term contract finance bridges mobilisation and delivery when payments or retentions are delayed. Lenders often require strong contract documentation and may take security over invoices, contracts or assets.

Supply chain / supplier finance

These programmes pay your suppliers early so the project keeps moving while your receivables and retentions remain outstanding.

Performance bonds, retention bonds and guarantees

Where appropriate, retentions can be replaced or supplemented with retention bonds or guarantees — some lenders prefer this as it reduces insolvency risk tied to the employer.

Asset & equipment finance

To avoid using working capital for plant and vehicles, asset finance can preserve cash for retentions and payroll.

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What lenders look for when assessing retentions & extended terms

Lenders price risk and structure deals around several underwriting factors. The stronger these are, the more likely you’ll secure retention-friendly funding.

• Contract details: clear signed contract, payment schedule, retention clauses and dispute resolution.
• Counterparty strength: who is holding the funds — public sector and large PLCs are viewed more favourably than small private developers.
• Retention profile: total retention amount, staged releases, defects period length.
• Security: assets available, charges, director guarantees.
• Performance history: project delivery record, references and WIP reporting.
• Financials: management accounts, cashflow forecasts and bank statements.
• Disputes & insolvency risk: any history of contract disputes or liens.

Key point: the contract and the counterparty matter more than the retention percentage.

Typical terms & costs you might expect

All figures are indicative — actual terms vary by lender, sector and risk.

• Invoice factoring: advances typically 70–85% of the invoice value (retentions often advanced at lower rates), fees 0.5–3% per month depending on risk.
• Retention finance: fees are higher due to legal/admin complexity; arrangement fees and monthly charges apply.
• Contract bridging: interest and arrangement fees higher than standard bank lending; short-term facilities (weeks/months).

Minimum facility sizes for many specialist providers often start around £10,000 and upwards — have realistic expectations and compare multiple offers.

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How UK Business Loans matches you to the right lender / broker

We streamline the search so you don’t have to contact dozens of providers yourself.

1. Complete the quick enquiry form (2 minutes). Include contract value, retention %, employer/counterparty, expected payment terms, turnover and contact details — the more detail, the better the match.
2. We match your enquiry to lenders and brokers in our network who specialise in construction retentions and extended payment terms.
3. Introductions and responses — partners typically respond quickly; they may request supporting documents if interested.
4. Receive and compare offers — you choose whether to proceed. There’s no obligation to accept any offer.

Benefits:

• Faster than contacting multiple lenders yourself.
• Access to niche retention specialists you may not find easily.
• Free to use — we only make money when enquiries convert, so our focus is on finding good matches.

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Real-life scenarios — when retention-friendly finance works best

• Example A: A small contractor wins a £200k contract with 5% retention. They need cash for materials. A factoring facility plus a small retention top-up releases enough to cover mobilisation and labour.
• Example B: A subcontractor awaiting a 120-day final account uses retention finance to bridge the defects period until retention release.
• Example C: A regional contractor with multiple projects replaces working capital used for plant purchases with asset finance, freeing cash to manage retentions across sites.

Documents & information lenders typically request

Have these ready to speed up responses:

• Signed contract or purchase order, including retention clauses
• Client/employer details and any correspondence showing retentions
• Recent management accounts (12–24 months) and bank statements
• Project valuations, WIP statements and invoices
• Identification for directors

Risks, protections and what to watch for

Specialist finance comes with trade-offs:

• Higher cost: retention finance and bridging are typically pricier than standard overdrafts or loans.
• Security: some facilities require charges over assets or personal guarantees.
• Complex terms: waterfall arrangements and holdbacks can be confusing — ask for a full breakdown of all fees.

Key questions to ask any lender or broker:

• What is the total cost (arrangement, admin, ongoing fees)?
• Is the funding partial or full against retentions?
• What are the default triggers and consequences?

Always read lender terms carefully and clarify any points before agreeing.

Frequently asked questions

Will submitting an enquiry affect my credit score?

No — completing the initial enquiry does not affect credit scores. Lenders or brokers may perform checks later if you apply.

Can firms with imperfect credit apply?

Yes — some specialist lenders work with imperfect credit profiles, although pricing and advance rates will reflect risk.

How quickly will I hear back?

Many partners respond within hours during business days; typical turnaround for initial quotes is 24–72 hours once they have the documents they need.

Does UK Business Loans charge to make an introduction?

No — our introduction service is free. Lenders or brokers may charge fees if you proceed with an offer.

Do you handle construction-specific lending?

Yes — we specialise in matching construction businesses to lenders and brokers experienced with retention and extended-term funding.

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Final summary — can we help you with retention or extended payment-term finance?

Yes — UK Business Loans can introduce you to lenders and brokers who work with extended payment terms and retentions. Outcomes depend on contract clarity, counterparty strength and supporting documents. To get fast, relevant options, complete a short enquiry and we’ll match you to partners who specialise in construction cashflow issues.

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Legal & compliance

UK Business Loans is an introducer, not a lender or regulated financial adviser. We match your enquiry with suitable lenders and brokers; completing the enquiry form is a free, no‑obligation way to receive introductions. Quoted terms are indicative — final offers come from lenders or brokers following their approval checks.

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